MONTREAL • It is a little-known fact that Canadian plane parts maker Héroux-Devtek Inc. engineered the landing gear for the Apollo lunar module in 1969, the first manned vehicle to touch down on the moon in America’s scramble to beat the Russians to the surface.

But back on Earth, recent history has been decidedly frustrating for Gilles Labbé and his board of directors.

From fiscal 2008 to 2012, the Héroux chief executive and his team delivered 24% operating revenue growth and 46% earnings per share growth for investors. He won new customers, such as Dassault Aviation, and he scored repeat business from existing clients including Lockheed Martin.

Yet, to hear him tell it, the market barely acknowledged this performance. It kept the company’s share price sputtering below $10 – a mark it has only twice surpassed since 1996 — and it drove Héroux’s largely independent board members to consider what they could do to help the stock pick up some altitude.

The conclusion: Reach back into history to focus on making the mechanisms that get aircraft safely on the ground and in the process sell two other business units that were widely considered non-core.

Portland, Ore.-based Precision Castparts Corp. agreed Tuesday to purchase Héroux’s aerostructure and industrial products divisions for $300-million in cash. The two units together represent about $130-million in annual revenue, or about one-third of Héroux’s total business.

Longueuil, Que.-based Héroux-Devtek will again become a pure-play landing gear manufacturer, ranking third in size worldwide for that area of expertise behind Goodrich Corp. and Safran SA’s Messier-Dowty.

It’s a strategic move that brings Héroux back to its roots. And it also raises the odds that the entire company may one day be put in play as the transaction price proves there is interest for its assets. Héroux struck a price representing an estimated 9.5 times trailing EBITDA for its two business divisions.

“When we look over the last two years, [our] stock is really undervalued,” Mr. Labbé told participants on a conference call discussing the transaction. “Even though we performed in terms of delivering additional revenues and profitability and developing the business, the market has not paid attention.”

Mr. Labbé said Héroux’s board made the decision to look for a buyer for the divisions as a way to change that. After tax and related expenses, Héroux said it expects to book net cash proceeds of about $230-million from the sale.

The company is weighing what to do with the money. Options include what it called a “significant” distribution to shareholders or repaying debt.

Héroux’s Toronto-listed shares jumped as much as 50% in trading Tuesday, hitting a record intra-day high of $11.75 before giving back some of the gains. They closed at $10.42, up $2.57 or 32.7% on the day.

“[This deal] clearly unlocks a lot of value,” said National Bank Financial analyst Cameron Doerksen. “If you think about where the stock was trading Monday, Héroux had a market cap of something like $240-million. They just sold basically a third of their business for an after-tax $230-million cash gain. So what it does is it realizes value that the market was not willing to afford the company as a combination of the three units.”

Exactly what was hampering Héroux’s share price is debatable. Valuations in general in aerospace remain somewhat depressed. And there is still a lot of concern about military orders in an era of fiscal austerity. Lawmakers in the Netherlands this month called for the country to scrap its participation in the F-35 joint strike fighter program, for which Héroux is a supplier, and the U.S. Pentagon has delayed delivery of its first batch of planes.

Héroux’s stock is also not a big volume trade, which also depresses demand, Mr. Doersen noted. The name might have been simply overlooked by many investors.

With the purchase, Precision Castparts acquires four Héroux manufacturing plants located in Quebec, Mexico, Arlington, Texas and Cincinnati, Ohio. Héroux said it plans to use its landing gear engineers to develop new products related to those systems, like flight controls and retraction activators. The sale leaves it with some 1,000 employees in the Unites States and Canada.

“This will make a far more simple business for shareholders to understand,” Cormark Securities analyst David Newman said.

Héroux has been the subject of takeover rumours as recently as 2007. But when asked if there is a possibility the company could sell its remaining business down the road as part of a planned exit strategy, Mr. Labbé said no such scheme is in the works.

“I’ve been building companies with my team for 30 years,” said the CEO, who owns roughly 12% of the Héroux’s outstanding shares according to Bloomberg data. “I’m not about to stop that.”

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